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House of Lords

Tuesday, 13th October 1998.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Norwich.

Lord Ahmed

Nazir Ahmed, Esquire, having been created Baron Ahmed, of Rotherham in the County of South Yorkshire, for life--Was, in his robes, introduced between the Baroness Ramsay of Cartvale and the Lord Davies of Coity.

Lord Hanningfield

Paul Edward Winston White, Esquire, having been created Baron Hanningfield, of Chelmsford in the County of Essex, for life--Was, in his robes, introduced between the Baroness Platt of Writtle and the Lord Dixon-Smith.

Drug Prices

2.48 p.m.

Lord Ashley of Stoke asked Her Majesty's Government:

    Whether they will review the NHS medical drug pricing system.

The Parliamentary Under-Secretary of State, Department of Health (Baroness Hayman): My Lords, the Government are currently reviewing their arrangements for controlling the price of medicines for the National Health Service. We are in discussions with the Association of the British Pharmaceutical Industry about the future of the PPRS, a system for regulating the prices of branded prescription medicines supplied to the NHS. We will make announcements about the shape of the new scheme when the discussions have been concluded and decisions on future policy taken.

Lord Ashley of Stoke: My Lords, I thank my noble friend for that Answer. Does she agree that the pharmaceutical industry has a tremendous list of achievements to its credit but that that does not excuse the exploitation of a number of drugs by some firms? Have the Government investigated the case of syntometrine, which is the drug given in virtually all cases of childbirth to prevent haemorrhage? She will recall that the price was increased eightfold overnight and that was within the PPRS. What is the Government's view of that massive overnight price increase? What are they doing to prevent such exploitation?

Baroness Hayman: My Lords, I am aware of the case, and other comparable cases, to which my noble

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friend alludes. The PPRS requires that any price changes should be agreed with the Department of Health. Such agreement was not reached in the case to which he refers. It is a matter of concern and the department is trying satisfactorily to resolve the situation. Any new scheme must take into account the fact that such problems occur and ensure full compliance with its terms.

Earl Howe: My Lords, this is the first opportunity I have had from these Benches to congratulate the noble Baroness on her appointment to her new position in the Government. I do so most warmly. Does she agree that an effective way of reducing the NHS drugs bill is to encourage doctors to prescribe generic medicines, where they exist, rather than branded medicines? If she does agree can she say what incentives or levers there will be for doctors within the new primary care groups to prescribe generic rather than branded products?

Baroness Hayman: My Lords, I am grateful to the noble Earl for his welcome, his kind words and his constructive and helpful question. Generic prescribing is an important way of containing the cost of the drugs budget while at the same time ensuring that the needs of patients are met. The primary care groups will provide great opportunities for encouraging generic prescribing through the spreading of good practice, the implementation of the information systems which can support effective prescribing--for instance, the new PRODIGY system--and through uniform budgets ensuring that the relative costs of the various healthcare provisions are properly assessed one against the other.

Lord Dean of Beswick: My Lords, expensive drugs which would be of immense benefit to certain categories of patients are not presently available through the National Health Service because of their price. Can the price of such important drugs, especially those used in the treatment of cancer, be negotiated in order to make them available to sufferers who would benefit from them?

Baroness Hayman: My Lords, we are concerned that any system of price regulation encourages the uptake of beneficial medicines and pharmaceuticals whose expense can often be offset by savings on, for example, the cost of hospital admissions. We hope that the proposals for the evaluation of new treatments on the basis of their clinical and cost effectiveness carried out by the National Institute for Clinical Excellence will ensure not only cost effective prescribing of what is available but the proper and universal adoption of new treatments which may be beneficial.

Baroness Knight of Collingtree: My Lords, will the Minister consider the possibility of putting on all NHS prescriptions the actual value of the prescription, which is always well above the sum asked for in a prescription charge? Would that not be advantageous?

Baroness Hayman: My Lords, I am not certain that the sum is always well above that which is charged.

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I accept some of the basis for the noble Baroness's suggestion in terms of responsible use of pharmaceuticals, but not that the price of a product should be a disincentive to people who need it using it. However, we all know that there is wastage in NHS drug prescription through non-compliance with the instructions of doctors or by wastage through over-prescription of drugs that are not taken. I am particularly interested in the potential role of community pharmacists in helping patients to understand their responsibilities in this area.

Lord Peston: My Lords, before asking a question, I declare an interest as an honorary member of the Royal Pharmaceutical Society and also as chairman of the Office of Health Economics. While the Government are entirely right to scrutinise the drug bill as a whole and also in detail, can my noble friend tell us how total expenditure on drugs within the NHS compares, either as a percentage of GDP or as a percentage of total health expenditure, with the expenditure of similar nations in Europe? Is it the Government's view that the drugs bill on that comparative basis is excessive?

Baroness Hayman: My Lords, what the Government are concerned about is getting value for money with regard to the drugs bill. My noble friend is right to point out that the international comparators are quite good. Drugs are cheaper in some countries but we are cheaper than other countries. The figures are broadly comparable within the EU. However, that does not take away from us the responsibility for ensuring that, while the profits are there to pay for future research and development, we do what we can to contain what is a very high proportion of NHS expenditure.

Lord Clement-Jones: My Lords, on behalf of these Benches I add our congratulations to the noble Baroness, Lady Hayman. We look forward to working with her. It is clearly, on precedent, a very good route for promotion. I welcome her reply to the Question. However, will she confirm that the mechanism for new price controls will be based on the prices of individual drugs, will be statutory and will be based on the cost effectiveness of those drugs and not on the current profit-based system which favours the larger pharmaceutical companies and does not obtain the best deal for the taxpayer or the NHS?

Baroness Hayman: My Lords, I am grateful to the noble Lord for his kind words. I do not know whether it is a good route to promotion. It is certainly a hard act to follow. Perhaps I may also welcome the noble Lord to his Front Bench responsibilities in this field. I hope he will understand if I do not go into the detail of the future scheme, given that we are in the process of negotiation about it. Final decisions as to the shape of the scheme have not yet been taken. However, the principles are quite clear. We want to see the NHS getting value for the money spent and we want a scheme that ensures full compliance. We want to ensure that there are no loopholes and that it is fair and effective to all the parties. We want a scheme that is more

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transparent than has been the case in the past, not least because of the requirements of EU law, and we want to support effectively competition and innovation through research and development in this important industry.

Lord Annan: My Lords, I wonder whether the noble Baroness will take the review just a little further, into the whole funding of the NHS. Does she not agree that 50 years ago Aneurin Bevan got it right when he regarded medicine as a profession and not as part of a business enterprise? Does she not further agree that the internal market, imposed on the National Health Service by the previous government, has been disastrous in that it has created a vast army of bureaucrats who settle like blowflies on the National Health Service and suck into their guts the money that should be going to patients, to doctors and to nurses?

Baroness Hayman: My Lords, the noble Lord tempts me to go more than a little further in answering his question, but the point he makes is fundamentally right. The NHS was one of the greatest achievements in terms of social justice that has been seen anywhere in the world, not just in this country. Many who worked in it were deeply troubled by the introduction of a quasi-business ethic into it. The new climate of collaboration and co-operation rather than setting up false internal markets has been welcomed and will greatly help in achieving better value for money from the money we spend.

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